Tata for now

Features editor

A visit to India introduced us to a very different way of doing business, practiced by one of the country’s largest and most successful companies.

On a three-day visit with other UK journalists to see Tata Group’s major activities in India late last year, two factors come across clearly: Tata is a company which clearly believes in the power of engineering, both on a large and small scale, to improve people’s lives, and also believes that industry — in fact commerce in general — owes a debt to the society in which it exists. Best-known in the UK for its ownership of Jaguar Land Rover and Corus (it also owns Tetley Tea), its operations and philosophy represent a marked difference from many large Western industrial groups.

It has a very keen sense of it own history. Wherever you go within the Tata empire, you’re watched over by busts, statues and paintings of its founder, Jamshetji Tata, whose 175th anniversary the company will celebrate this year, gazing out with an expression which seems to combine shrewdness and benevolence between a luxuriant beard and a conical Parsee hat; and the company’s longest-serving chairman, the Indo-French JRD Tata, sharp-suited and with a matinée idol’s pencil moustache, who ran the company for 50 years from 1938. Both wrote themselves into India’s history in different ways: Jamshedji lent his name to the centre of India’s steel industry, Jamshedpur, while RJD’s lifelong obsession with flying (his boyhood home was next door to Louis Bleriot, and he obtained India’s first pilot’s licence) led to him starting the airline which became Air India.

The ubiquitous image of company founder Jamshetji Tata

Jamshetji’s sons, who began the company’s engagement with charities, funded causes including Mohandes K Ghandi’s early anti-apartheid campaigns in South Africa. Charity still runs deep with Tata: two-thirds of the company is owned by chartiable trusts which give away their income every year, funding a range of causes including education and health. India’s two leading cancer research centres are Tata-funded.

The company’s connection with the UK also goes back a long way — to Jamshetji himself, who, while working for his father’s textiles trading company, visited the Lancashire cotton mills in the early 1860s. Excited by the potential of engineering and technology to revolutionise textile manufacturing but appalled by the working conditions he encountered, on his return to India he founded his own cotton mill not far from Bombay, and instituted improved working conditions such as eight-hour working days, proper ventilation, and guaranteed pensions for workers well in advance of British mills.

When Jamshetji died in 1904, Tata was involved in hotels, textiles and hydroelectric power. It was JRD who expanded it to the company that exists today, founding Tata Motors, Tata Tea, Tata Consultancy Services. He maintained the company’s political neutrality — it still does not contribute to any political party at home or abroad — and founded Asia’s first cancer hospital.

It’s striking that a company the size of Tata has displayed such strong links with the community for so long, and it’s difficult to think of any Western equivalent. There are perhaps parallels with the Quaker industrialists of the late 19th century, such as Bournville, and with Lever Brothers, who built villages and schools for their employees; although Tata seems to have been less dogmatically religious.

Moreover, Tata has embedded helping the community into its business practices from its inception. Its business plan revolves around developing products for the largest possible market, which in India means people without much money, hence the Tata Nano, the world’s cheapest production car, developed to allow people who could previously only afford motorbikes to buy a safe car to hold their entire family; it also produces low-cost water purifiers and is a player in India’s telecommunications network, connecting rural villages.

The Tata Nano, designed for the widest possible market

It must be unlikely that a company could be formed along these lines today, certainly in the UK, where the financial sector surely wouldn’t provide funds to a business dedicated to donating so much of its profits to charity. Indeed, while every business has a corporate social responsibility component today, the impression is strong that for many, it’s something to which lip-service is paid, but for Tata, it’s the main raison d’etre of the company — and we heard this over and over again from employees who had come into the company from outside. It’s certainly refreshing and heartening to encounter a large business which sees no contradiction in operating this way.

You can read more about Tata, its engagement with the UK, and its development of technologies, in our next issue, which focuses on Tata Motors, and very soon on our website.

If one is interested in sub-standard products compared to those from Europe, Japan, and some other far eastern countries, this is the place to be.
It can hardly be called a model for Europe to aspire to.

On the face of it from this description, a corporation alien to European and American principles that actually values its employees, customers and shareholders in equal measure.

There is another I know of (although probably many more I don’t) Ricardo Semler’s Semco in Brazil. Semler wrote the book Maverick, a brilliant if largely ego massaging description of a hugely successful business built on the foundations of employees and customers.

The examples shownt by the great Jamshetji in the areas of Human relation had made inspiration for so many start ups and big industrial groups in INDIA.
That why when you hear the name TATA then the first item which will flash in your mind is Human Relations in industry than PROFIT accumulation.

Use of the term sub standard wont come if one understands what defines standard.
As a business, to go down to meet the need of major group of people – than just making profit is the best part of TATA as mentioned by Editor.

Wow! It is really refreshing to read such a positive article. Wouldn’t it be great if we could replicate at least some of these values in Europe, but I doubt that our unimaginative, self serving and greedy financial sector would like it. As for sub standard products, it is this arrogant and blinkered view that has helped lead us to the problems we face today. It will be interesting to see who is smug and arrogant in twenty years time!

Simplicity to reduce cost, does not imply “sub-standard”. Modern products have become so complex that they are unrepairable or not cost effective to repair. Just look at the internet to see how many car owners are desperate to have mysterious and niggling faults diagnosed on their cars. They have huge bills for routine repairs, because the designers don’t consider the need for ease of access to components for maintenance or have countless sensors, motors and microchips which fail or misbehave over time. Consumers do not want the trend for extensive electronics in cars, diminishing reliability and increasing maintenance costs. But the manufacturers are not listening because they are using the power of engineering to showcase their cleverness rather than increasing affordability. I want a simple, reliable, inexpensive car which is cheap to maintain. There are none. All modern domestic small cars now seem to have the equivalent of avionic systems, which will inevitably suffer early failures with corporate bills. India and TATA have got it right.

The reason there are so many electronic systems apportioned to the drivechain of modern vehicles is predominantly to reduce fuel consumption. From Crankshaft and wheel sensors to microprocessor controlled ignition and fuel injection, they are all necessary otherwise would still be running around in Hillman Avengers with Carburettors and points doing 20mph if we were lucky.

Modern cars are ‘advertised’ as doing 60 – 70mpg, and that’s not micro cars, that’s BMW’s and Mercedes. Furthermore, cars are far better built than they were 30 or 40 years ago. The life expectancy of a Cortina or Triumph Dolomite in the 70’s was probably 7 years with ten being the exception thanks to rust. But the mechanicals were not much better. I currently have two French cars, an 8 year old Renault Scenic and a 6 year old C4 Picasso, there is not a spot of rust on either and the petrol engine in the Renault has done 90,000 miles and is as sweet as a nut. The Citroen is a diesel and the engine is perfect at 60,000+. Both have ECU controlled fuel injection with air bags, electric windows, sunroofs, mirrors etc. etc. and the only things that usually fail are electric motors (thankfully few though) and they are generally caused by poor maintenance by Franchised dealers, and therein lies the problem. I only bought the Renault a month or so ago and the blowers and folding mirrors weren’t working; I lubricated the mirrors and they are now working perfectly, and I changed the pollen filter which obviously hadn’t been changed in years which caused the blowers controls to overheat and burn out because they rely on the airflow to keep cool. Nor is the aircon working, probably the same problem, which in turn affects the evaporator, now an expensive job, but I can still change it myself if I want to.

Simple cars are a thing of the past but that’s not the problem, the problem is lousy, overpriced servicing of basic components by Franchised dealers!

David Redfearn has been taken in by the hype from modern manufacturers.

Electronics might help the engine, but surely all of the other gimmics like electic windows, heated seats, central locking, suspension computers, electrically adjusted seats, stability control, ABS just add to the cost, weight and reduce reliability and second hand value. The bodies might last a bit longer, but the cars are written off because the electronics are too expensive to repair. How many cars do you see before an 05 plate ? – not many. The scrap yards are full of cars up to 2010.
I can imagine you will argue that old cars are inefficient and dirty. Our 50 year old Morris actually achieves around 35 to 40 mpg, which is less the modern manufacturers fictitious numbers, but at least it hasn’t needed replacement 5 or 6 times in that period which causes a massive environmental impact, far higher than a bit more fuel burnt.
As for stability control and ABS on my list, that is quite correct. ABS is only needed because modern cars are so over servoed so you can’t feel what the brakes are doing and stability control is only needed because there is no feel in the suspensions which are designed to go round corners a couple of mph faster but let go in a big way when you exceed it.

But there again, we can’t all have good taste and I am pleased that there are still enough Morris’ to go around. But why not design modern cars along the same lines but with better rust prevention.

My impression is that many British companies have lost their compassion. I have been retired for 20 years but prior to my retirement I worked for employers who cared about their workers. My children & grandchildren give the impression that their employers do not. As an example of caring I would quote my father’s pension situation. He retired from an RTZ subsidiary on a fixed pension. When the inflation in 1974 exceeded 20% he was given ex-gratia payments to supplement his pension. By the time he died the ex-gracia payments were more than his pension. I doubt if any British company would do that these days. The TATA philosophy sounds good and their JLR products are selling. When British or American owned they nearly went out of business.

I too had the privilege of visiting India in the 80s: this was as the ‘technical’ element of an EC/Brussels mission looking into improper labeling (and hence illegal importing) of textiles from that country and area. I was so enthralled by the obvious and rapidly growing confidence of Indian business: as (to put it bluntly) it was gradually removing the influence of the Raj and replacing such with its own innovation and advance.

Yes, it was then still suffering from all the old ‘habits’ which sadly ‘we’ left behind. I believe that the likes of Tata (and many other major firms) were deservedly fact becoming the front-runners and leaders of India, NOT the civil service(s) and other institutions : perhaps that is indeed the message.
Our Nation was indeed Great Britain when the great Engineers, manufacturers, entrepreneurs held sway: but all too soon and often in far too many countries, the clerks (call them whatever else you like, but that is what they are) regain control, often by the default of their betters, allowing them out of the counting house and into the board-room…I could go on.

As well as its present power-house of manufacture, India has still retained its most beautiful artistic nature and culture.

Agree entirely. Considered scrapping a 15 year old BMW a few years ago because the stupid electric motors in driver’s seat had contorted its shape and then stuck. MOT failure if you can’t adjust fully electric seat. Not repairable. Cost of replacement seat – astronomical (could buy another car). Combined with numerous other minor but costly electronic faults (especially instrument cluster and windows) – unsaleable. Car manufacturers have lost the plot – TATA is picking up the pieces with proper insight.

We in India highly respect the Tatas, for corporate responsibility, humanity, charity, ethical business, and their products and services. Whatever Jamshedji, JRD, Dorabji Tata did, IT HAS IMMENSELY HELPED INDIA. I have read that JRD had said once, “What is good for India, is always good for Tata.” That’s what is happening still. Whatever is good for India, is indeed good for India, as they always think and care for India and its people.

Aditi’s comment reminded me of a lovely cartoon in Punch.
Three small boys, French, Spanish and American are swapping comments.
Spanish boy: “General Franco is good for Spain”
French boy: “General de Gaulle is good for France”
The two turn to the American:”hey bud, what’s good for America?”
“General Motors!”